The UK insurer Aviva announced a record jump in its sales of private medical insurance on Wednesday. New data showed that patients are turning to private healthcare at an unprecedented rate, while the NHS is struggling due to long waiting times.
The FTSE 100 insurer said in a trading update that its private healthcare sales grew 25 per cent, to £33mn, during the first quarter. This was due to the NHS backlog encouraging to move to private.
Amanda Blanc , Aviva’s CEO, said: “While the NHS is doing a fantastic job for millions, some people would like to speed up their treatment or have confidence that, should anything happen to them in the future, they will be able to receive that accelerated care.” The volumes are robust, and we don’t expect that to change anytime soon.
She said that Aviva had taken on 123,000 new customers for private medical services in the last year. She added that its products included a virtual GP, which was attractive to those who struggled to get an appointment at their local practice.
Blanc stated, “I believe private healthcare should be seen as an important complement to the NHS during these difficult times.” Aviva’s Health and Protection business generated £2.5bn of revenue last year.
NHS England published figures showing that at the end March, 7.3mn people were still waiting to begin hospital treatment.
The Independent Private Healthcare Information Network (PHIN), which released a report on Wednesday, also found that 820,000 UK inpatients and day-case admissions will be made in private hospitals in 2022. This is the highest number recorded since 2016 when the organization began tracking treatment data.
The total for the year was an 8 percent increase over the previous year and a 5 percent increase over 2019, the last year full before the pandemic.
In the fourth quarter 2022, more than 200,000 people became private. This was a record for any quarter.
The PHIN reported the highest number of procedures covered by private medical insurance since the beginning of the pandemic. In 2022, there were more self pay admissions – where people chose to fund their healthcare themselves rather than using private health insurance – than in previous years.
PHIN Chief Executive Ian Gargan expects that there will be over 1mn patients in the private sector this year. He also predicts that private medical insurance will become more popular. He said that despite the cost of living crisis people are still willing to pay for their health.
Gargan believes that the public’s awareness of NHS wait lists and their uncertainty about how long they may have to wait are the primary causes for the rise in demand. He added that people are aware they could be waiting for a long period of time to get a new knee or a cataract. They feel forgotten if they don’t hear from someone in a while.
Spire Healthcare, an independent health care group listed in London, reported in March a 8% increase in revenue for the fiscal year ending 31 December 2022. The increase in revenue was attributed to increased private treatment. Private revenue grew by 14.5%.
Justin Ash, the chief executive of Spire Healthcare, said that “last year continued to see changes in UK healthcare with more people seeking safe and prompt private care”. Spire’s outlook also noted that private patient inquiries were higher than the previous year.
Bupa, a multinational healthcare company, also revealed that the demand for private health insurance has increased in its annual results published in March.
Investors were less impressed by Aviva’s overall performance in the first quarter, as stormy markets affected its wealth business, and its solvency rate came in slightly lower than analysts’ expectations.
On Wednesday, it was revealed that Cevian Capital had completely sold its stake of Aviva three years after the start of its campaign.
By afternoon trading, the shares of the insurer were down by 5 percent.